Yesterday, U.S. District Court Judge Richard Berman vacated Tom Brady’s four-game suspension in what has been infamously titled “Deflategate“. The 40-page opinion was striking not in its commentary over whether Tom Brady did or did not conspire to or deflate footballs in an NFL game, but rather, like any citizen, Tom Brady was entitled to a fair arbitration.

Judge Berman more or less accepted the arbitrator’s “…facts as the arbitrator found them.” citing to Westrbook Corp. v. Daihatsu Motor Co., Ltd. 304 P.3d 200, 213 (2d Cir. 2002), but ruled Brady was given “inadequate notice of his potential discipline and alleged misconduct”, denied the opportunity to examine lead investigators and NFL Executive Vice President and General Counsel Jeff Pash, and “denied equal access to investigative files, including witness interview notes.[1]

Arbitration clauses, such as the one Brady was subject to under the NFL Players Collective Bargaining Agreement limited Brady in access to evidence and the ability to cross-examine witnesses. These rights are paramount to the civil justice system but are often waived through arbitration clauses appearing in employment contracts, consumer transactions, and nursing home care. Yesterday’s ruling will have implications beyond just a few deflated footballs, but refocus attention to the necessity of a fair shot at justice.

[1] Judge Berman’s ruling cited to via the New York Times, available here.

Washington joins Massachusetts and Rhode Island in considering new legislation that would severely limit or void many non-compete agreements. Known in Washington as House Bill 1926, the law would principally require that “every contract by which a person is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” If enacted, Washington would join other leading states like California that severely limit non-compete agreements in employee contracts.

Supporters of the bill point to the enormous success of the tech industry in Silicon Valley where similar bans exist. However, critics say non-competes are necessary to protect the employer’s investment in training, education, and exposure to confidential company information.

For the casual reader, non-competes agreements in Washington are often thought of in three parts: (1) agreements to not work for a competitor/customer; (2) agreements to not solicit customers; and (3) agreements to not solicit employees. The three are colloquially thought of as one agreement. However, Washington courts view each of these provisions differently with the burden on the employer to show that the agreement is reasonable.[1]

The debate surrounding non-compete agreements have increased due to recent reports of non-compete clauses showing up in low-wage manual labor contracts. The New York Times reported in 2014 of non-compete agreements showing up in Jimmy John’s employee contracts. The company’s actions have prompted congressional attention to ban non-competes for certain worker categories or workers earning below a monetary threshold. This is a notable contrast to non-competes widespread use for high-wage earners such as executives, engineers, scientists and high-commission sales employees.

This was the question posed by Lauren Weber of The Wall Street Journal in her article, "Can You Sue the Boss for Making You Answer Late-Night Email?"

The author cites Pew Research Center studies that report 44% of internet users regularly did some job tasks outside the workplace. While smartphone technology has greatly increased the availability of workers, it hasn’t necessarily increased their overtime. While the vast majority of white-collar workers are exempt from the Fair Labor Standards Act and Minimum Wage Act, new Department of Labor rules are expected to change this.

In Washington, what constitutes “work” is the often a major dispute in minimum wage and overtime cases. “Work” is not defined in the MWA or the FLSA, but the courts have defined work as activity or inactivity that is requested or allowed by the employer and that is pursued predominantly for the employer’s benefit, even though it confers a benefit on the employee.

See: Tennessee Coal, Iron & Railroad Co. v. Muscoda Local 123, 321 U.S. 590, 598, 64 S. Ct. 698 (1944) (defining work as “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business”).

The Washington Administrative Code defines “work” under WAC 296-126-002(8), as “hours worked” as “all hours during which the employee is authorized or required by the employer to be on duty on the employer’s premises or at a prescribed workplace.”[1]

Several notable companies have been sued for failing to pay overtime for smartphone use after hours, namely Verizon, T-Mobile and Black and Decker. Set for trial in August 2015, a Chicago police sergeant has filed suit against the City of Chicago alleging that he was required to respond to emails and text messages while off duty, but without receiving overtime.

While there have been relatively few of these types of smartphone/after-hours cases, this may change following revision of the Department of Labor rules expected for release and public comment any day now.

[1] Applied in Stevens v. Brink’s Home Security, Inc., 162 Wn.2d 42, 48-50, 169 P.3d 473(2007), Mechanics were engaged in “work” when they drove company vans from their home to the first customer at shift’s start and drove from the last customer to home at shift’s end.

Last Sunday, The New York Timesuncovered how consumers can unknowingly play a part in wage theft of exploited workers. Reporter Sarah Maslin Nir was having her nails done one day and asked the salon worker what her schedule is like. The manicurists stated that she works 24 hours a day, with naps, 6 days a week and not paid minimum wage. Maslin’s research uncovered that the price of nails in New York City was far less than the national average and began to connect the dots between exploited immigrants and the real price of a manicure.

Federal Law requires that employees be paid minimum wage[1] for all hours worked.[2] However, sometimes employers pay employees using more elaborate forms such as a “piece rate” or a “salary”. This can lead to issues for employees where the “piece rate” falls below the state or federal minimum wage. For example, overtime is calculated at time-and-a-half the “regular rate”. The regular rate must include all compensation, other than overtime compensation. See: Hisle v. Todd Pac. Shipyards, 151 Wn.2d 853, 862-63, 93 P.3d 108 (2004). This is then divided by the total hours worked during the workweek, so that the pay can be expressed as an hourly rate on which the 50% overtime premium can be calculated. Alternatively, employees can be paid a “salary”, but when divided by the number of hours the employee works and the per hour rate falls below the minimum wage, an illegal practice occurs.

The New York Times' article highlights how the price of many consumer goods or services do not reflect the real price of the good or service. For example, the Washington Supreme Court is likely to issue their ruling on if or how fruit pickers in Eastern Washington should be paid for rest breaks. Washington’s law requires a 10 minute rest break for each four hours worked under WAC 296-126-092(4), however Sakuma Farms employees paid per basket or bushel complain of never receiving pay for their rest. A new ruling that mandates this pay may have a financial impact to farmers and consumers alike, where the price of blueberries rises to the real price.

[1] The 2015 Federal Minimum Wage is $7.25.

[2] “Work” is not defined by the Washington Minimum Wage Act or the Fair Labor Standards Act, and is defined through case law as that which is pursued predominantly for the employer’s benefit, even though it confers a benefit on the employee. See, e.g.: Tennessee Coal, Iron & Railroad Co. v. Muscoda Local 123, 321 U.S. 590, 598, 64 S. Ct. 698 (1944) (defining work as “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business”).

The inquiry focuses on dated “reporting-time” laws intended to ensure workers are paid a minimum number of hours when they physically show up at a job for a scheduled shift. Nowadays, employees report being notified via text message or email whether they are required to work that day. This practice can circumvent the requirement to pay employees minimum hours.

New York is one of just 8 jurisdictions with reporting-time pay laws that include: California, Connecticut, The District of Columbia, New Hampshire, New Jersey, Massachusetts, Oregon (minors only), and Rhode Island. Surprisingly, Washington does not require “show-up” pay. The Washington Department of Labor states “Generally on-call pay does not have to be paid unless the worker is actually called back or receives a phone call at home that will fix the problem, which would be considered hours worked.”

Washington has very strong laws that protect workers from performing work without pay, however “on-call” or “show-up” pay is noticeably missing from these laws. As retailers use new technologies to meet efficient staffing needs, the employee ultimately loses where he or she is constantly “on-call” but without pay.

The recent verdict in the Ellen Pao trial (against her employer for gender discrimination) highlights the risks employment lawyers face in trial. Pao sought nearly $16 million in lost wages and millions more in punitive damages. Had a verdict been returned in her favor, her attorney, Alan Exelrod, could have also petitioned the court for attorneys’ fees, estimated to be in the millions.

While attorneys’ fees are widely available in successful employment claims, they are often criticized by employers for encouraging litigation, in spite of the strong public policy that support attorneys’ fees.

While Pao’s case was in the millions, many times the recovery of wages for low-wage workers can be small. Without attorneys’ fees, employment attorneys working on a contingency fee basis alone would otherwise be dissuaded from pursuing a low-damages trial.

However, sometimes the smallest recovery can be the most important to employees. In my own practice, a recovery of $500 against an employer who wrongfully withheld $500 can make all the difference to an employee’s ability to pay rent, a cell phone, gas, food, etc. A small recovery may also represent the end of an illegal wage practice. Imagine an employer who requires employees to work “off the clock.” or denies rest-breaks or meal periods. In total, these damages may not amount to millions, but pursuing recovery of these small claims ensures workers are paid correctly under the law.

These attorney fee statutes for wage cases are designed to permit employees to recover full wages where legal fees would greatly exceed the underlying claim.[1] The purpose of the fee award is to “ensure effective access to the judicial process by providing attorneys’ fees for prevailing plaintiffs with wage and hour grievances”.[2]

Do you remember when you were an hourly employee and you received “time and a half” for hours worked over forty? Your boss needed you to work and you needed the money. Life was good. A great exchange of extra money for your valuable time.

But now, you are older, wiser, more educated, more experienced and now paid on a “salary”. So what happens when your boss asks you to work over 40 hours? You work… but you don’t get paid.

So whatever happened to overtime pay?

Odds are high, you don’t receive overtime and aren’t required to. In fact, a study done by the Economic Policy Institute (“EPI”) reported that only 11% of American workers are required to receive overtime. This is generally because:

Your position is likely “exempt” under the current definitions of executive, administrative, and professional employees[1] and

Your annual income does not fall below $23,660 ($455 per week) to qualify for mandatory overtime under the Federal Labor Standards Act (“FLSA”).

The FLSA, passed in 1938, gives the Federal Department of Labor (“DOL”) authority to promulgate regulations and enforce federal labor laws. However, the last update to the overtime dollar amount threshold occurred in 1975. As a result, most businesses are able to require “overtime” be performed by the employee without extra pay.

If this strikes you as unfair, then regardless of your political affiliation, you have a friend in the White House. On March 13, 2014, President Barack Obama issued a presidential memorandum calling for revisions of the DOL’s regulations that could have a major impact on salaried workers in America. These revisions are expected this Spring.

The President has called for revisions of the exemptions for “executive, administrative, and professional employees” (often referred to as “white collar” exemptions). These exemptions, in addition to the $455 per week regulations, have been criticized widely and allowed for low-wage positions to be exempt from overtime (i.e. “Assistant Managers” or “Shift Supervisors” at popular fast food restaurants, despite performing the same or similar duties as hourly employees).

So what does this all mean to you? Well, the Economic Policy Institute equates the current $455 per week, $23,660 per annum rate to $984 a week or $51,168 in today’s dollars. Meaning, employers paying less than $984 per week, may be required to pay non-exempt employees overtime if the new regulations adjust to these amounts and definitions are updated. This could have a substantial economic impact on white collar workers either directly in the form of additional compensation for additional hours worked (or reduced hours) or indirectly through increased hiring to fulfill a previous unpaid need.

[1] These are just a few of the positions excluded from the FLSA and state Minimum Wage Acts. The Minimum Wage Act and FLSA have different minimum wage and overtime exemptions. In addition, the Minimum Wage Act does not include many of FLSA amendments, namely, amendments passed in late 1940s.

Overtime laws vary widely from state to state. If you have questions or concerns whether you are paid appropriately, you should seek legal advice from an employment lawyer.

Last November, I had the privilege of speaking alongside Federal and State Department of Labor and union leaders on the issue of wagetheft in Tacoma. I was asked to speak about my own experiences as a private attorney who represents low-wage workers recover unpaid wages and/or payment for denial of rest breaks.

What became clear during the discussion and the public’s Q&A afterward, is at least three common myths surrounding wagetheft still exist.

Myth: “I am afraid to complain to my boss because I will be fired.”Answer: An employer is prohibited from discharging or discriminating against an employee for complaining to the employer or the government that his or her RCW 49.46 rights have been violated, for filing or about to file proceedings “under or related to RCW 49.46, or for giving testimony or being asked to testify in proceedings “under or related to” RCW 49.46.[1] The Federal Labor Standards Act also prohibits retaliation for exercising wages rights.[2]

Myth: “I can’t afford a private attorney to pursue my unpaid wages claim.”Answer: A worker owed wages has several options. He or she may make a complaint at the Department of Labor and Industries (State/Federal), complain to their union (if applicable) or hire a private attorney. Most private attorneys, like myself are paid by the employer only in the event they recover wages for the worker. The strong Washington worker laws allow for an employee to hire a private attorney on a contingency basis.

Myth: “I am not a US Citizen, am I still entitled to wage law protection?"Answer: The law surrounding undocumented workers is constantly changing. Washington State has made a leading effort to protect the rights of undocumented workers by preventing worker status from entering the courtroom.[3] Second, the Rules of Professional Conduct prohibit an attorney from making assertion or inquiry “about a third person’s immigration status when the lawyer’s purpose is to intimidate, coerce, or obstruct that person from participating in a civil matter.” Even the Washington State AG’s Office will not inquire as to immigration status of anyone complaining of wage theft.

[3] In Salas v. Hi-Tech Erectors, 168 Wn.2d 664, 230 P.3d 583, the Washington State Supreme Court held it was an abuse of discretion under ER 403 to allow a jury to learn of the Plaintiff’s immigration status in awarding lost future income. The Court wrote:

Yesterday, the Senate Labor Committee of the Washington State Legislature heard public comment on Senate Bill 5514. This bill, in its current form, would allow for a “good faith” exception for employers who relied on any order, directive, or written ruling to escape owing back wages to employees.

As an injury and employment attorney, I regularly represent low-wage workers in the recovery of back wages. Clients come to me with coffee-stained pay stubs and confusion on why they are being shorted $80 a week, or denied rest breaks, or told to work “off-the-clock”. It is sometimes a heart-wrenching conversation to tell a client that recovery of those wages may involve years of litigation.

This bill, if law, would create another barrier for workers to recover those wages. Allowing an employer a “good faith” exception might incentivize some employers to pay even less attention to current wage laws and would allow an employer to escape not only civil penalties, but the actual wages owed.

Yet, existing law already allows for an employer to avoid civil penalties under RCW 49.48.083, if the employer “reasonably relied” upon a rule, order, or administrative policy. This means, that in the event of a bona fide dispute, the employer would be liable for back wages only, and not an additional penalty issued by the Department of Labor and Industries. This is fair.

This bill runs counter to a very long and proud history of protecting workers from wage theft in Washington.[1] If employers are going to take on the responsibility of an employee, they must know the wage laws that ensure each worker receives honest pay for honest work. Ignorantia juris non excusat (“Ignorance of the law does not excuse”).

If you also oppose this bill or are interested in submitting your own written comments, you can contact your state legislator or comment here.

Last Friday, the Washington State Attorney General announced criminal charges against Former Seattle Seahawk defensive tackle Sam Adams. Adams is the owner of the West Seattle Athletic Club in Seattle and the Lincoln Plaza Athletic Club in Tacoma. While the Tacoma club is now closed, The Seattle Times reported that 20 employees filed labor complaints against the clubs for unpaid wages and benefits during his ownership.

Friday’s announcement marks only the second time the Attorney General has filed criminal charges in a wage-theft case. While the Washington Department of Labor and Industries investigates more than 4,000 civil complaints of wage theft a year, criminalizing wage theft has been a problem of enforcement in many communities. Seattle’s own efforts to criminalize wagtheft have resulted in exactly 0 convictions, despite being law for over three years.

The AG’s high-profile criminal charge against a former Seahawk as well as last fall’s Paseo suit involving unpaid workers brings much needed attention to wagetheft in the region.

The public can support such efforts to eliminate wagetheft by contacting your state legislator to show support for Senate Bill 5050 and companion House Bill 1089.